Don’t Write it Down?

What entrepreneur hasn’t been told of the need for a written business plan? But most, when asked whether they have one, would cast a guilty look at their shoes. Well…… Julian Lange author of research at Babson College Massachusetts, regarded as having one of the top entrepreneurship programs in the United States, finds no statistical correlation between a startup firm’s ultimate revenue or net income and the supposedly requisite written business plan. “Some of the heroes of today’s would-be entrepreneurs, such as Steve Jobs, Bill Gates and Michael Dell, did not have business plans in hand when they embarked on ventures that changed the world,” the study noted. The research aimed to debunk the business plan more than three years ago as a “myth”….

Great research Lange, but, I’m taking a more moderate approach. (After all how many non Jobs, Gates , Dells are there out there)….. A business plan is very important in the verb sense, The noun sense form? Well…. Writing a formal business plan invites the paralysis of analysis, this is the death of most start-ups that never were. On this point Julian I can agree with you. But it is the Business plan process that is important, there is a reason every business school in the world teaches the business plan template. The goal behind this is building a framework for your start-up… in your mind, look at it as process for an entrepreneur’s mind. Not a process of articulate sentence structure and the proper sourcing of academic periodicals. Those tasks do, in fact, bog you down, they distract the entrepreneur from abstract though, you know, the actual place where new ideas come from. Or worse intimidates the writer with the threat of intellectual punishment of an english professor with a red pen! If you do get tripped up with those details early on…. you will end up taking too long….. Involving to many people… The result: a long-winded missive that yes, is in your hands, but out of date almost the moment when the black and red ink dries. As for Jobs, Gates and Dell certainly those three had a business plan in mind even if it wasn’t written down. They would easily be able to tell you the operating margins, the market gap that there were going to fill, and they would certainly have a quick elevator pitch/ executive summary if asked what there business model was…. So they certainly had a business plan in the verb sense even if they did not have one in the nonsense of the noun sense

Should you think through business-planning issues such as how you’re going to move from thought to action, how you’re going to find customers and how you’re going to pay the bills?……Or better yet, how will you build your team? Yes, Yes….Double plus yes and certainly. Should you agonize over writing everything down in a format that scholarly journal says is the way to do it? “Unless you’re entering a business-plan competition, no,” says Julian Lange, in the Babson study. “Your time would be better spent out developing BETA tests for your product or services, learning all you can from potential customers.” This Julian…. I can certainly agree with,